The Transpacific Partnership Agreement (TPPA) has shrunk into the 11 member “Comprehensive and Progressive Transpacific Agreement” (I’ll call it the TPPA-11) with the exit of Trump’s USA. The Government is now selling it to us as sufficiently improved to be worth signing and ratifying. There are some improvements but it is still a bad deal.
First, there are numerous parts of the TPPA-11 that are still bad. They include making it difficult to use government purchasing to help new industries and improve working conditions; preventing state-owned enterprises from favouring local suppliers and making them act commercially at all times; ISDS and restrictions on our ability to improve the quality of foreign investment; barriers to regulating finance and areas like private education; a labour chapter that is in practice unenforceable, and other concerns about impacts on working conditions such as the use of ISDS against improved labour law.
The Government’s five ‘fixes’ that it says make the deal satisfactory are weak. The market access for farmers is far behind what was promised, and modelling suggests much will be at the expense of exports to non-TPPA-11 markets. Upholding the status of the Treaty of Waitangi turns out to be just the standard provision that has been in New Zealand agreements since 2001, without the strengthening that the Waitangi Tribunal is suggesting. Preserving the right to regulate is good as far as it goes – a declaration that New Zealand will not support ISDS in future negotiations, and trying to get side letters with other TPPA-11 countries to agree not to use ISDS. In fact the side letters have found only one country other than Australia (which always signs them with New Zealand): Peru. Investors from all the other countries can still use full ISDS against New Zealand. The TPPA-11 constrains the right to regulate in many other ways too. Protecting the Pharmac model relies heavily on suspension of provisions which are at risk if the US rejoins. The ability to control the sale of New Zealand homes is being resolved by legislation before TPPA-11 comes into force – but then, other needed policies will be ruled out.
Finally, the economic modelling is badly flawed. For example it cannot tell if the agreement will increase inequality, whether jobs are lost or gained in total, what the transition effects will be on people and communities as increased imports or offshoring threaten jobs, what happens to the balance of trade, and the impact of the financial system. Economic gains are tiny, even we can believe the modelling, and manufacturing other than food processing loses. Environmental impacts are ignored. There is still much to be concerned about.
Download the full bulletin: CTU Economic Bulletin 198 -March 2018
